And finally, I would have to say that just as Commerce has served a role over the years as being a sort of a place where things that do not fit elsewhere are put, placing its functions in other departments would, I think, necessarily diminish the coherency of those other departments, and that may, perhaps, be an argument for keeping some of them at least together.

Chairman ROTH. You testified that the major Commerce operating units are generally responsible for their own administration. Does that imply that they can be split off into independent agencies without the added costs normally associated with creating a new agency?

Mr. STEVENS. Their independence and relative autonomy, I think, makes that more the case with Commerce units than would normally be the case in Government, but there are some departmental services that NOAA, for example, gets. NOAA is the largest of these and it is quite independent. I believe it takes up about 43 percent of Commerce's budget.

However, it also takes up 18 percent of the total drawing fund that the individual units take from headquarters. So, for example, the IG function-about a third of the Inspector General staff is devoted to NOAA issues and presumably would have to go along with them.

Chairman ROTH. Gentlemen, I appreciate your being here. Your testimony is helpful.

We will keep the record open for one additional week for any follow-up questions.

At this time, I would like to insert into the record a statement from Senator Akaka.

[The prepared statement of Senator Akaka follows:]

PREPARED STATEMENT OF SENATOR AKAKA

I would also like to express my concern over S. 929. Coming from a region that relies heavily on functions within the Department of Commerce, particularly NOAA, I believe that any attempt to transfer, privatize, or eliminate functions must be done prudently. We cannot afford to look at the dismantling of the Commerce Department solely from a budgetary or political standpoint. In certain instances, life and property are at stake.

For example, Hawaii and the Pacific territories would be greatly affected without NOAA's satellite capability to produce weather forecasts. In a typical year, the central and eastern Pacific have three times as many tropical storms and hurricanes than the Atlantic basin.

Under S. 929, reduced funding of NOAA's satellite systems would eliminate half of NOAA's satellite capability, resulting in a blackout should a working satellite fail. This would virtually eliminate and severely limit the ability of the National Weather Service to monitor weather conditions in the Pacific and thus jeopardize the public safety of residents in this region.

I am also deeply concerned that the relocation or elimination of the International Trade Administration could harm our national economic interests, international competitiveness, and U.S. exports. In recent years the Commerce Department has been successful in promoting exports, opening foreign markets, and safeguarding fair competition.

The volume and tone of correspondence I am receiving from small firms and large corporations indicates the success and support enjoyed by ITA. I can add my own testimonial. Last year a small firm from Hawaii petitioned the ITA to investigate allegations of unfair practices by foreign competitors. The ITA conducted a lengthy, thorough, and fair investigation, agreed with the U.S. petitioner, and determined dumping margins that were affirmed by the International Trade Commission. Without the expertise, experience, and resources of the ITA, the Hawaii firm-which was outspent at least 10 to 1 by the foreign industry-may not have received the full

protection of U.S. law from unfair competition. I believe it would be ill-advised to radically alter the current structure of the ITA.

Mr. Chairman, we cannot move this bill through Committee without calculating its potential impact on the effectiveness and success the Commerce Department functions it proposes to eliminate or restructure. I look forward to hearing from Secretary Brown and others today on this important issue.

Chairman ROTH. Thank you very much. The hearing is adjourned.

[Whereupon, at 5:13 p.m., the Committee was adjourned.]

S. 929 DEPARTMENT OF COMMERCE

DISMANTLING ACT

THURSDAY, JULY 27, 1995

U.S. SENATE,

COMMITTEE ON GOVERNMENTAL AFFAIRS,

Washington, DC.

The Committee met, pursuant to notice, at 9:32 a.m., in room SD-342, Dirksen Senate Office Building, Hon. William V. Roth, Jr., Chairman of the Committee, presiding.

Present: Senators Roth, Stevens, Glenn, and Lieberman.

OPENING STATEMENT OF CHAIRMAN ROTH

Chairman ROTH. The Committee will please be in order.

Today, the Committee on Governmental Affairs will once again consider restructuring of the missions and functions of the Department of Commerce. The bill we are considering, the Department of Commerce Dismantling Act, is a starting point for the comprehensive, Government-wide restructuring that the public demands.

Today's Government is an obsolete, 50-year-old relic characterized by huge, hierarchical bureaucracies. As we have heard from GAO, there is wholesale duplication, overlap, and fragmentation in functions and spending. In a nutshell, the taxpayers are paying for one agency to set a policy or perform a function, another agency too often to contradict that agency, plus several other agencies who receive funding to perform some related role. As a result, an extensive patchwork of coordinating committees has been created to prevent the bureaucracy from grinding to a halt.

I might say this apparatus has been created down through the years in both Republican and Democratic administrations. So it is not a partisan issue in that sense.

The Commerce Department is a microcosm of this obsolete, dysfunctional structure. It has been described as a loosely-knitted holding company of agencies pursuing unrelated missions. Its management systems and controls are on OMB's high risk list. It directly serves only a small number of favored American firms and industries. Many in the business community have serious doubts that it adds sufficient value to justify its continued existence. Almost all of the experts agree: Commerce should be restructured to eliminate wholesale duplication and fragmentation and bring coherence to the management of its important functions.

Trade may present the most compelling case for change. I firmly believe there is one thing we can all agree on: the critical trade functions of our Government are of vital importance to the economic health of our Nation. I, for one, am convinced that today's (113)

fragmented structure can no longer be justified in today's era of increasingly intense international competition.

We have heard thoughtful concerns about the way in which the bill before us would restructure the National Oceanic and Atmospheric Administration. We should be careful not to lose the synergies between the oceanic and atmospheric missions which led to NOAA's creation in the first place.

Let me be clear about one thing. The Committee is not on a warpath to arbitrarily terminate agencies. We are not out to collect scalps to mount in a trophy case. Nor are we engaged in a superficial shell game which merely redraws boxes on an organizational chart. Our objective is to reduce costs, but most importantly, improve service throughout our Government.

The improvements we expect will not come easily. The only way to achieve them is through in-depth analysis of functions, smart use of new technology, and decisive action to eliminate redundancy and fragmentation, while improving the performance of our organizations and work force.

Commerce is only the starting point in our larger exercise. But its elimination forces us to confront the big picture issues involved in managing change on a broad, Government-wide scale. Is it time to consider creating a Department of Natural Resources as a home for NOAA and other environmental agencies? Should a single department manage the Nation's trade and economic affairs?

How can similar work activities in different agencies be consolidated and automated to improve efficiency and effectiveness? Does the Executive Branch have the capacity to manage the closing down of a department? If broader restructuring is to follow, should we create a smarter change management agency than the proposed Commerce Programs Resolution Agency?

These are the issues we will probe in depth with our witnesses today. While the concerns raised to date about certain parts of the bill before us are valid, they can also be fixed. No problem has been raised that cannot be resolved by the good faith efforts of this Committee. None seriously detracts from the bill's important objectives, which directly and faithfully respond to the concerns of the American people for a Government that costs less and works better. [The prepared statement of Chairman Roth follows:]

PREPARED STATEMENT OF CHAIRMAN ROTH

Today, the Committee on Governmental Affairs will again consider restructuring of the missions and functions of the Department of Commerce.

The bill we are considering, the Department of Commerce Dismantling Act, is an excellent starting point for the comprehensive, governmentwide restructuring the public demands. Today's government is an obsolete, 50-year-old relic characterized by huge, hierarchical bureaucracies. As we have heard from GAO, there is wholesale duplication, overlap, and fragmentation in functions and spending. In a nutshell, the taxpayers are paying for one agency to set a policy or perform a function, another agency to contradict that agency, plus several other agencies who receive funding to perform some related role. As a result, an extensive patchwork of coordinating committees has been created to prevent the bureaucracy from grinding to a halt. The Commerce Department is a microcosm of this obsolete, dysfunctional structure. It has been described as a loosely knitted "holding company" of agencies pursuing unrelated missions. Its management systems and controls are on GAO's high risk list. It directly serves only a small number of favored American firms and industries. Many in the business community have serious doubts that it adds sufficient value to justify its continued existence. Almost all of the experts agree: Com